Grain is a commodity whose transfer is burdensome, as it is paper intensive. Currently, all processes for handling and storing grain warehouse receipts, price later (credit sales) contracts and other documents are all papers that must be transferred among the various users and authorities, from the government and private sectors.
The current paper warehouse receipt system is cumbersome, costly and inefficient. Paper warehouse receipts (also known as warehouse receipts or receipts), serve as evidence of title to an amount of a commodity, such as grain. These paper receipts, must be accounted for at all times, and stored for years after their cancellation. Each specific paper receipt must be transferred between the warehouse, grain owners and lien holders, to assure the control and protection afforded by physically possessing these receipts.
Should a paper receipt become lost, business is slowed, as the receipt holder must resort to affidavits and other legal expenses to recreate the lost receipt. Additionally, since the receipts are paper, they can be forged and counterfeited. As a result, warehouses expend substantial sums of money in securing unused receipts, to prevent fraudulent use of these receipts. Conversely, during periods of heavy activity, warehouses may run out of paper receipts, causing a slowdown in business.
Also, paper receipts must be transferred between holders manually. This results in increased handling costs. Paper receipts, since only one is issued, must be viewed at in-person meetings, and are therefore, not available at all times.
Similar to paper receipts, price later contracts are also currently paper only. These contracts must be accounted for at all times, and stored for years after their cancellation. Paper contracts are highly regulated, and since they require signatures of the buyer and the seller, copies must be filed separately for licensing authorities to periodically review. Selling transactions need to be documented on the grain dealer copy, and in some cases, on the licensing authority's copy of the contract as well.
Paper contracts are burdensome, as grain dealers must store, safeguard and account for used and unused contracts, to insure against fraud. Also, paper contracts can be counterfeited and signatures forged and fraudulently obtained. Additionally, since the paper contracts are typically standard contracts, they are custom printed, and relatively expensive. Should a provision of the law change, these standard contracts must be rewritten, whereby these unused contracts must be properly disposed of.
Should a paper contract become lost, the process of recreating the contract, with its expenses must be undertaken.
Also, dealers and buyers may run out of paper contracts during times of peak business. This slows down business, while new blank contracts are being printed or otherwise obtained. By using paper contracts, grain dealers and buyers must have paper contracts at all of their locations. This is simply cumbersome.
Also, as a result of the contracts being paper, parties must meet in-person to sign the contracts. This is time consuming for both parties involved. Should a contract be amended, the parties must again meet in person to sign the amendment or amended contract.
Moreover, in the cases of paper receipts and paper contracts, should authorities and other regulators wish to examine these documents, they need to make an arrangement with the holder and come to the holder's place of business at preset hours, to make the examinations. This limits access to these documents and can halt business until the regulators or authorities have traveled to the document storage site and completed their review.